Over the last decade, PropTech has been changing the way the real estate industry operates, but at its core, property is about people.
It’s always been said that real estate is a relationships business and even with the influx of PropTech firms that make transactions both easier and more transparent, buyers and sellers still need a certain level of human interaction and support in what is often the biggest investment they will make in their lifetimes.
Even amongst tech-savvy millennials, it’s clear that the relationship between vendor and agent and even buyer and agent is paramount to their comfort when conducting a real estate transaction.
A recent survey from The National Association of Realtors found that millennials were most likely to use both the internet and a real estate agent when purchasing a home. So clearly that’s something the world of PropTech needs to keep in mind.
Since 2011, there has been over USD$300 million in funding invested into Australian PropTech, according to a report from Unissu, which shows just how big the sector is becoming.
However, something that isn’t lost on many of the most innovative startups, is that in many segments of the industry, technology must complement the human element in a real estate transaction and not try to replace it.
Julian Antonescu of ListReady, a PropTech firm that helps provide finance to agents on behalf of vendors to enhance their marketing budget, believes the human aspect of a real estate transaction is always a key element for both buyers and sellers.
“I believe that relationships are paramount. And even though there’s a lot that goes on in the background, it is all a relationship process,” Mr Antonescu said.
“Where PropTech fits in, is helping those relationships come first while making the other administrative services happen in the background with as little involvement from the vendor and agent as possible.”
As median property prices reach (and exceed) $1 million in Australia’s largest cities, the size of the transaction has never been greater. Mr Antonescu feels that no matter the type of buyer, these type of transactions and their size highlight the importance of agent-buyer rapport.
“Buying or selling a property is a major life milestone, it’s a major achievement for most and also it’s another way to improve their lifestyle. You’ve got property investors, first home buyers and the range of buyers is just so broad.
“And because of the size and nature of that transaction, for many that can be both scary and exciting. But they really need someone to help them and they need to have confidence in the person they’re dealing with, which in this case is the agent.
“Agents have a massive role in helping people make a decision that’s really going to help them change their lives.”
Mr Antonescu says that while different subsets of the industry don’t need to focus on the relationship element directly, ListReady has always put the human element at the forefront of what they are about as a company.
“Our business interacts with both the agent and the vendor and our goal is to give both parties a pleasant experience. While at the same time, speeding up the time it takes to list a property significantly.
“ListReady, backed by ASX listed Innovator of The Year MoneyMe, ultimately helps the agent work with a bigger marketing budget, which allows them to move from a more traditional marketing approach to include styling and staging as well as gardening, or hiring a handyman for repairs.
“So it takes the pressure off the agency to provide those funds and it makes the “listing related expense” conversations with the agent a lot less tense. So the agents can focus on their main job, which is getting that property ready for sale.”
Ensuring they’re adding value to both sides of a real estate transaction and focusing on enhancing relationships was always a part of ListReady’s business model, according to Mr Antonescu.
“It was very clear from day one that the only way ListReady would be of value to vendors is if the agents were confident and we had their support.”
PropTech is certainly changing the face of real estate both in Australia and around the globe. But it’s clear that buyers and vendors still need to build trust with the agent and that’s something PropTech can’t replace.
ListReady is an example of a business model that doesn’t replace the human element – it simply enhances it while making the entire process far more efficient.